by John Zielinski
Do you remember the Agricultural Revolution? How about the Industrial Revolution? Of course you don’t. You weren’t born yet. On the other hand, you may have learned about these in school and you may remember some of what you learned. Before the Second Agricultural Revolution of the 18th century it took the collective effort of most of the population to feed the entire population. Some estimate that the number of agricultural workers represented 80% to 90% or more of the people – men, women and children – who were alive at the time. Today agriculture is a major industry in the US, but the number of people directly employed in that industry is less than 2% of the total employed population. What happened to all those people who used to work raising crops and animals? A similar question may be asked about the people who were displaced from their jobs by machinery during the Industrial Revolution.
In the early 1980s I had just started working in the industry that’s known today as information technology. I started as a programmer. Today we often use the term “developer” or “software engineer” for the job, but in the end it’s still the same – create the code that becomes running software based on requirements and specifications. At that time, automotive companies in the US began to invest heavily in industrial robots both in terms of supporting R&D at robotics companies and in deployment of robots to the factory floor. From a business point of view, it made perfect sense. Robots work 24 x 7, don’t call in sick, don’t take vacation, don’t demand other benefits and don’t ask for raises. In a nutshell, the cost of robots over time was lower than the cost of human workers doing the same manufacturing tasks. While this had the potential to provide significant benefits to the manufacturers this would come at the cost of jobs. Robots performing work on the line meant that the humans who had done that same work previously were superfluous. The strength of the UAW allowed it to negotiate and mitigate some of the impacts of the robots on workers at least for the short term. I was glad that I worked in an industry where robots couldn’t do what I did.
About 20 years later I had the opportunity to talk with the chief information officer of a major, international bank. Banks are huge users of information technology. The largest banks have thousands of people developing, testing, deploying and maintaining software. After all, money in the bank is really nothing more than data. He laid out his vision for the future. First, he wanted more sophisticated tools so that the bank’s developers would become more productive. This was definitely possible. Next, he wanted to use that increased productivity to reduce the number of developers that the bank employed. Fewer developers meant lower costs. Lower costs meant more profit. This was also possible once the staff became familiar and comfortable with the new tools. Third, he wanted to replace his most expensive developers – those with the highest salaries and costliest benefits – with developers in countries that had lower employee costs. Since the bank had development centers around the world this was possible without resorting to outsourcing. Finally, in his perfect world even the lowest cost developers would ultimately be eliminated as software created software. This last piece is still not possible in the large, but as far back as the 1990s I was involved in research in which software evolved solutions to problems with minimal human intervention. This CIO’s vision may become possible one day.
These stories aren’t random ramblings. They’re concrete examples from the past of a more or less inevitable march. Change brings change. Whether the change is forward movement depends on one’s point of view. How one change fits into the overall flow of time is by no means clear even in retrospect. One thing that is clear, though, is that those changes often mean that fewer people are needed to do the same amount of work that was previously done. This leads to a critically important question. How many workers are really needed to do everything that must be done? In this case, “needed” means “cannot be fulfilled by means other than human workers.”
There are a lot of concerned workers out there. Many fear that their jobs are being sent overseas to be filled by lower cost workers. While that’s true in many cases, it’s equally true that technology has made it possible for businesses to make do with fewer employees and that’s not a trend that’s likely to abate. Over time it seems probable that work that was once considered impossible to be done by machines at all will become the domain of machines.
[Aside: Decades ago I read my first book on robotics. It was a university text and the time was the late ‘60s. The author proclaimed that anthropomorphic robots would never be possible. Why? Computers would never be small enough to be mobile. As we all know, powerful computers (also known as “smartphones”) today are small enough to be carried in pockets and purses. Honda demonstrated an anthropomorphic robot as far back as the turn of the 21st century. Boston Dynamics offers some amazing anthropomorphic robots. Predicting the future with accuracy has a notoriously low success rate.]
One of my colleagues who crunches numbers for a living has come to the conclusion that all the work currently being done by the entire active work force could actually be done by less than 25% of that work force. Think about that for a minute and let it sink in. Now, before saying, “Bullshit!” look around your workplace honestly and think about what you see. Think about work that could be done entirely by machines of various kinds. Think about work that could be done more efficiently and remember that greater efficiency means fewer people to do the same amount of work per unit of time. Think about the number of people who are kept on payroll “just in case” they’re needed. Maybe in your specific world 25% is too low, but the number is almost certainly some fraction of the total number of people currently on payroll. This has rather significant and unfortunate implications for the country as a whole.
The economy of the United States is built on consumerism. This goes beyond addressing basic needs: food; clothing; and shelter. Ordinary people are convinced that they need to buy more and more stuff. Some of it is stuff in addition to the stuff that they already own thus increasing their total amount of stuff. Some of it is stuff to replace other stuff. Get rid of your current car that’s not yet paid off and get the new, cooler, more expensive model! Forget that 2 year old, 60 inch, 1080p flat panel TV that you already own; you need this new, more expensive, 60 inch, 4k flat panel TV! Stuff, stuff, stuff! Former president George W. Bush nailed it when he said in a speech in December, 2006, “I encourage you all to go shopping more.” This creates an economic conundrum for businesses.
Ordinary people – the 99% who aren’t rich – need disposable income to buy stuff. To have disposable income they need jobs. How does the economy keep running if businesses find ways to eliminate 75% of the current workforce? There are some who would say that the spending of the 1% will offset the losses. Really? At present the 1% are spending a certain amount. This is in addition to the spending of the 99%. Here’s your mathematical word problem for the day. If total consumer spending is x AND this is the sum of the spending by the 99% plus the 1% AND 75% of the 99% lose their jobs thus reducing their disposable income, how much more does the 1% need to spend to keep the total flat? The more important question is why the 1% would suddenly have reason to increase their spending by that amount. The upshot of this is an economic and societal death spiral.
As fewer people are employed total domestic spending decreases. As total domestic spending decreases corporate profits decrease. As corporate profits decrease due to reduced revenues costs are cut in an attempt to stabilize the situation. As costs are cut the number of people employed is decreased further. On top of that, companies that are unable to adjust are compelled to go out of business and release their entire workforces. Taken together, the total number of people employed decreases. Repeat until the economy and the society collapse.
The preceding is a pretty dour scenario. The question that we need to collectively answer is how to avoid the death spiral from happening. It’s a simple question that lacks a simple answer. The one thing that’s certain is that it’s a question that absolutely must be answered. Attempting to point fingers and place blame will serve no purpose and provide no solution. Ignoring the question will not make it go away. Though similar to past challenges in some ways, the available options for moving forward are more constrained. It seems that we need new economic and social models to address a problem whose parameters are rather different than those of the past. How does a society in which paid workers are largely unnecessary provide for both the needs and the wants of the population in the absence of traditional, for-profit ventures driven by personal spending? Discovering, refining and implementing those models will be no piece of cake. This may easily qualify as a Grand Challenge. Who’s willing to step up?